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Communications operators for the 21st century, or digital dinosaurs?

13/09/2011 12:01
Now is the time for Communications operators to take action to grab the opportunities which abound due to the rise and impact of digital transformation. If they fail to respond quickly they are in danger of becoming digital dinosaurs, according to a new report, “Converged organisations – creating value inside and out”, from PwC.

For too long the Communications industry has talked about making the customer the focal point for its business models and offerings, but it has struggled to turn words into action due to issues with existing internal structures and, in some cases, complicated operating models.

Colin Brereton, global communications leader, PwC, said:

“Operators have shown true resilience during the economic crisis but they now face other challenges. To avoid a permanent reduction in growth rates and margins, they need to move quickly to turn digital transformation to their advantage and win the battle for value.”

Companies need to be brave and restructure by integrating both services and structures in order to create a customer experience which will differentiate them from their competitors. And it’s not just the other operators they need to worry about, but competitors such Google, Apple and other content producers who are encroaching on their territory and taking away their customers. They need to create loyalty to their brand and not be seen as a simple delivery mechanism for the content and experiences, created by others, which are being sought by the tech savvy customers who are driving the changes in the marketplace.

So what must the operators do to stem the churn in their customer base and deliver the services within the tight margins they have set?:

• Ruthlessly assess their readiness, and develop their organisation to be able to deliver the services required by the customers which will enable them to capture their share of the digital wallet.
• Stop working in silos and bring together areas such as product development and go to market strategy while keeping the customer at the heart of the organisation. This will help them to cope with the fast-changing environment and the high level of competition in the industry. And it will also help them to offer cost savings, allow the sharing of intelligence and allow the delivery of integrated services.
• A trusted billing relationship is vital. Customers’ willingness to make micropayments for everything from content and applications to related merchandise depends largely on having a trusted billing relationship with their service operator. If the operator can’t deliver a smooth service, the customer will look elsewhere.
• Understand the customer touch points and manage the data they’ve collected intelligently and effectively to encourage a wider take up of services by the customer. They also need to build relationships within the industry and also across adjacent industries such as content producers in entertainment & media and advertising. Even, in some cases, forming business relationships with organisations who they would have previously considered competitors to deliver the breadth of services the customer demands.
• But most of all, understand the opportunities which are available to them and make the right choices for their organisation.

Added Colin:

“Customers are increasingly demanding and if they can’t get the service – delivery method or content – from their existing suppliers they will change. Loyalty is a cheap commodity and people will quickly switch to the provider who can supply an enhanced experience or value added service for them.

“But by moving swiftly to centre the business on what the customer needs and create a complete view of the products each customer adopts, operators will be able to transform customer service, reduce churn and vastly increase the opportunities for cross-selling and up-selling.
“And if they don’t, they’ll become digital dinosaurs and lose their place in the digital marketplace.”